RBI mandates a three-year cooling-off period for co-operative bank directors after ten years of service to enhance governance and compliance.
RBI Revises Cooling-Off Period Norms for Co-operative Bank Directors
The Reserve Bank of India (RBI) has introduced amendments requiring that directors of co-operative banks observe a mandatory cooling-off period of three years after serving ten consecutive years on the board. This measure aims to strengthen governance and accountability in the co-operative banking sector.
The amendments were prompted by observations that some directors had been circumventing tenure limits through temporary resignations followed by reappointments, undermining governance frameworks. By enforcing this cooling-off period, the RBI seeks to prevent such practices and promote effective leadership changes.
Legal professionals advising co-operative banks should guide their boards in implementing these new norms to ensure compliance and uphold governance standards.
Citations
- RBI (Co-operative Banks Directive) Amendment (2026) 2 RBI 34
